Tuesday, April 22, 2008

independent post mortem...

"We live side by side, not together." That's how one Malaysian described the fallout from decades of race-based affirmative action policies to me last week. Malaysians, she said, are fed up.

It shows. In federal and state elections here Saturday, voters of all ethnicities turned to opposition parties in larger numbers than ever before -- a rebuke to Prime Minister Abdullah Badawi and his National Front coalition's pro-Malay platform. Opposition parties won 82 of 222 seats in the national parliament, up from only 19. The biggest gainer, the People's Justice Party, emphasized equality of opportunity for all ethnic groups.

This represents a huge shift in thinking for Malaysians, and a welcome and overdue one at that. While around 60% of the country is Malay, another one-third are Chinese and Indians, with other ethnic groups making up the rest. But since the introduction of the New Economic Policy in 1970s, Malaysia hasn't been governed for the whole of its citizenry; it's been governed mostly for Malays.

Call it affirmative action gone wild. When the NEP was launched, its goals were twofold: to eradicate poverty "irrespective of race" and to restructure the economy away from race-based economic roles for the various ethnic groups. For a country escaping the legacies of colonial British rule, recovering from violent, anti-Chinese race riots and facing extreme poverty among Malays, those goals are easy to understand. Social stability through government-directed outcomes seemed the best balm political leaders could deliver at the time.

The NEP was supposed to last only two decades. In any case, surely Malaysia's elites didn't envision the scope of the pro-bumiputra, or indigenous Malay, bent that evolved. Consider just a few of the discriminatory policies that are now on the books. On the corporate front, foreign and domestic non-manufacturing firms have to take on bumi partners who hold at least 30% of the share capital. Firms that want to list on the Kuala Lumpur stock exchange are required to reserve 30% of their equity for bumi shareholders. Bumis get preferential housing loans and easier access to business licenses and government contracts. Department stores and supermarkets have to reserve 30% of their shelf space for bumi products -- regardless of consumer preferences. Little wonder Wal-Mart isn't here.

Then there's the education system. Before the NEP, Malaysia's public schools were mostly racially integrated. Now they're largely segregated, as Chinese and Indian parents opt to send their children to schools where they feel they won't be discriminated against or exposed to Islamic teachings. More than 80% of government scholarships to study abroad go to Malays. Business leaders tell me they have a hard time sourcing good local talent, across a range of industries -- largely because they're required to have 30% bumiputras on their staff.

These policies have, if anything, become more entrenched over time. While the original NEP called for Malays to get 30% of the country's wealth -- whatever that means -- subsequent economic plans inserted vague language calling for more "wealth creation" for bumiputras. As for encouraging racial tolerance, that hope was put to bed in 2006, when the party conference of the United Malays National Organization was broadcast live and Malay representatives said they'd defend pro-Malay policies to "the last drop of blood." After the prime minister concluded his remarks, shouts of "Long live the Malays!" filled the chamber. Needless to say, the 2007 conference wasn't televised.

This bumi bonanza has slowed investment in Malaysia, and the ruling coalition knows it, even if officials won't say so publicly. At a time when foreign investment has poured into Vietnam, China and India, Malaysia has seen a much smaller sliver of that pie. It's fallen from America's 10th largest trading partner to its 16th largest in little over a year. Malaysia has lost automobile plants to Thailand and electronics plants to China. Motorola, a major electronics employer, threatened to pull out of Penang late last year but decided to stay when the local government awarded the company a major contract. (On Saturday, voters there voted in the opposition Democratic Action Party.)

In this weekend's election, ethnic Chinese swung heavily to the opposition Democratic Action Party, as the victory in Penang showed. Ethnic Indians, too, plumped largely for opposition candidates. But the Malay swing vote -- the core of the National Front coalition -- contributed to the surge. The first indication of the swing came in the capital, where the daughter of opposition leader Anwar Ibrahim beat the National Front candidate. (Mr. Anwar, a former deputy prime minister, was barred from running.) Then opposition parties took the states of Kelantan and Kedah -- an unprecedented victory in a rural Malay-dominated belt.

It's never easy to shed affirmative action policies; as the American experience shows, once preferential treatment is given to a specific ethnic group, it's a hard habit to break. But if Saturday's opposition gains show anything, it's that even Malays are starting to figure out that pro-Malay policies are hurting the country. That is, at least, a start.

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So you losers out there. No need point fingers as to who is responsible. The true fact is that the whole governing system of BN rots. NEP breeds abuses like CORRUPTION which in turn, breeds overly inflated project's budget at the expense of rakyat. The rakyat has awakened to that truth. Do us a favor. Dont open your mouth unless you want to tell the truth.

True that its a hard habit break once preferential treatment is given to specific ethnic group but it will be a grave mistake to ignore this Wind of Change.

The rakyat are together now to make sure that this country is govern in true and proper manner.

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